As investment

Date: 2015-10-07; view: 623.

Prices

Markets of grain and products of their conversion. The world prices in the markets of foodstuff. Animal husbandry products

Cereal is a grass (members of the monocot family Poaceae, also known as Gramineae) cultivated for the edible components of their grain (botanically, a type of fruit called a caryopsis), composed of the endosperm, germ, and bran. Cereal grains are grown in greater quantities and provide more food energy worldwide than any other type of crop; they are therefore staple crops.

It was reported on March 24, 2008, that consumers worldwide faced rising food prices. Reasons for this development include changes in the weather and dramatic changes in the global economy, including higher oil prices, lower food reserves, and growing consumer demand in China and India. In the long term, prices are expected to stabilize. Farmers will grow more grain for both fuel and food and eventually bring prices down. Already this is happening with wheat, with more crops to be planted in the United States, Canada, and Europe in 2009. However, the Food and Agriculture Organization projects that consumers still have to deal with more expensive food until at least 2018.

It is rare for the spikes to hit all major foods in most countries at once. Food prices rose 4% in the United States in 2007, the highest increase since 1990, and are expected to climb as much again in 2008. As of December 2007, 37 countries faced food crises, and 20 had imposed some sort of food-price controls. In China, the price of pork jumped 58% in 2007. In the 1980s and 1990s, farm subsidies and support programs allowed major grain exporting countries to hold large surpluses, which could be tapped during food shortages to keep prices down. However, new trade policies have made agricultural production much more responsive to market demands, putting global food reserves at their lowest since 1983.

Food prices are rising, wealthier Asian consumers are westernizing their diets, and farmers and nations of the third world are struggling to keep up the pace. The past five years have seen rapid growth in the contribution of Asian nations to the global fluid and powdered milk manufacturing industry, which in 2008 accounted for more than 30% of production, while China alone accounts for more than 10% of both production and consumption in the global fruit and vegetable processing and preserving industry. The trend is similarly evident in industries such as soft drink and bottled water manufacturing, as well as global cocoa, chocolate, and sugar confectionery manufacturing, forecast to grow by 5.7% and 10.0% respectively during 2008 in response to soaring demand in Chinese and Southeast Asian markets.

Rising food prices over recent years have been linked with social unrest around the world, including rioting in Bangladesh and Mexico, and the Arab Spring.

Institutions such as hedge funds, pension funds and investment banks like Barclays Capital, Goldman Sachs and Morgan Stanley have been instrumental in pushing up prices in the last five years, with investment in food commodities rising from $65bn to $126bn (£41bn to £79bn) between 2007 and 2012, contributing to 30-year highs. This has caused price fluctuations which are not strongly related to the actual supply of food, according to the United Nations. Financial institutions now make up 61% of all investment in wheat futures. According to Olivier De Schutter, the UN special rapporteur on food, there was a rush by institutions to enter the food market following George W Bush's Commodities Futures Modernization Act of 2000. De Schutter told the Independent in March 2012: "What we are seeing now is that these financial markets have developed massively with the arrival of these new financial investors, who are purely interested in the short-term monetary gain and are not really interested in the physical thing – they never actually buy the ton of wheat or maize; they only buy a promise to buy or to sell. The result of this financialisation of the commodities market is that the prices of the products respond increasingly to a purely speculative logic. This explains why in very short periods of time we see prices spiking or bubbles exploding, because prices are less and less determined by the real match between supply and demand." In 2011, 450 economists from around the world called on the G20 to regulate the commodities market more.

Some experts have said that speculation has merely aggravated other factors, such as climate change, competition with bio-fuels and overall rising demand. However, some such as Jayati Ghosh, professor of economics at Jawaharlal Nehru University in New Delhi, have pointed out that prices have increased irrespective of supply and demand issues: Ghosh points to world wheat prices, which doubled in the period from June to December 2010, despite there being no fall in global supply.

Livestock are domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. This article does not discuss poultry or farmed fish, although these, especially poultry, are commonly included within the meaning of "livestock". Livestock generally are raised for profit. Raising animals (animal husbandry) is a component of modern agriculture. It has been practiced in many cultures since the transition to farming from hunter-gather lifestyles. ‘Livestock' are defined, in part, by their end purpose as the production of food, fiber and/or labor. The economic value of livestock includes:

Meat –the production of a useful form of dietary protein and energy

Dairyproducts –is mammalian livestock can be used as a source of milk, which can in turn easily be processed into other dairy products, such as yogurt, cheese, butter,ice cream, kefir, and kumis. Using livestock for this purpose can often yield several times the food energy of slaughtering the animal outright.

Fiber –is livestock produce a range of fiber/textiles. For example, sheep and goats produce wool and mohair; cows, deer, and sheep skins can be made into leather; and bones, hooves and horns of livestock can be used.

Fertilizer –is manure can be spread on fields to increase crop yields. This is an important reason why historically, plant and animal domestication have been intimately linked. Manure is also used to make plaster for walls and floors, and can be used as a fuel for fires. The blood and bone of animals are also used as fertilizer.

Labor -animals such as horses, donkey, and yaks can be used for mechanical energy. Prior to steam power, livestock were the only available source of non-human labor. They are still used for this purpose in many places of the world, including ploughing fields, transporting goods, and military functions.

Land management -the grazing of livestock is sometimes used as a way to control weeds and undergrowth. For example, in areas prone to wild fires, goats and sheep are set to graze on dry scrub which removes combustible material and reduces the risk of fires.

During the history of animal husbandry, many secondary products have arisen in an attempt to increase carcass utilization and reduce waste. For example, animal offal and non-edible parts may be transformed into products such as pet food and fertilizer. In the past, such waste products were sometimes also fed to livestock as well. However, intra-species recycling poses a disease risk, threatening animal and even human health (see bovine spongiform encephalopathy (BSE), scrapie and prion). Due primarily to BSE (mad cow disease), feeding animal scraps to animals has been banned in many countries, at least in regards to ruminants and pigs.